Here’s how appraisal gap coverage can be a vital tool for homebuyers.
I took a look at our MLS recently, and we had just 485 single-family homes and 220 condos available for purchase. In this competitive market, a lot of times there are multiple-offer situations where you’re competing against multiple buyers.
Appraisal gap coverage is important in this kind of market. Let’s say a property is listed for $100,000 and you make an offer of $115,000. A clause in the standard contract states that the property has to appraise for the contract price. In appraisal gap coverage, you agree to pay above and beyond the appraisal price if the home doesn’t appraise.
Now let’s say the appraisal comes in at $102,000. You’re now on the hook for the additional $13,000 up to the contract price. Often these are the types of offers that are winning.
If you have questions for me about buying a home, appraisal gap coverage, or anything else related to real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.